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U.S. military drawdown to benefit commercial operators

By Hpanchal on February 10, 2012

With the recent U.S. announcement that a military drawdown will start as early as next year instead of 2014, as originally planned, there could soon be a heavy demand for airlift out of Afghanistan. This business from the U.S. military has the potential to benefit commercial contractors, but other countries may move their goods back home with in-house equipment.

“We obviously keep a close watch on what is happening in this market, and we have had what could be some early indications of this policy change,” said Larry Coyne, CEO of UK-based Coyne Airways. “Some of our B747-400F flights are now beginning to return with full loads of what the U.S. military term ‘retrograde’ traffic to Dubai, from where it can easily be transported by ocean.”

The given word was that the U.S. military exit strategy from Afghanistan would likely see it dump most of its equipment in the desert. That is not how it works these days, and “retrograde” is likely to quickly become the watchword for operators in the Afghanistan market. “This equipment is far too valuable and sophisticated to leave to rust,” Coyne said. “Besides, the U.S. Defense Department has become very wise and savvy to making the best use of the commercial market to provide its logistic support at competitive rates.”

According to Coyne, the U.S. Defense Department has an annual transportation budget of $3 billion, 70 percent of which is allocated to the private sector. Contrast that allotment with the UK’s Ministry of Defense, which insists that it directly handles all defense-related transport business, a policy shared by most other European defense departments.

“It is a policy you could possibly understand if it related to a strategic build-up in a war zone. But we are now talking about a much more measured withdrawal — yet they insist on sticking to the same policy,” Coyne said. “Instead of going to the forwarders or operators like us, they go to the charter market and pay through the nose for each single charter.” These charters, he added, are usually military C-17s, which he said cost 300 percent more than commercial freighter lift.

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